Researcher Incentives and Empirical Methods
Economists are quick to assume opportunistic behavior in almost every walk of life other than our own. Our empirical methods are based on assumptions of human behavior that would not pass muster in any of our models. The solution to this problem is not to expect a mass renunciation of data mining, selective data cleaning or opportunistic methodology selection, but rather to follow Leamer's lead in designing and using techniques that anticipate the behavior of optimizing researchers. In this essay, I make ten points about a more economic approach to empirical methods and suggest paths for methodological progress.
This essay was written for the NYU Conference on Economic Methods. I am grateful to the Taubman Center for State and Local Government for financial support. My thoughts on this topic are the result of conversations over years with many people, but I am particularly indebted to Robert Barro and Lawrence Katz. Guido Imbens, Lawrence Katz and especially Edward Leamer provided helpful advice. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.